Inspector General Report Warns of Budget Overruns in Nuke Refurbishment

Government officials overseeing the refurbishment of nuclear warheads that date to the Cold War say they can keep the work on budget. But they can’t explain how.

That’s one of the findings of a new report issued Sept. 26 by the Department of Energy inspector general.

The effort to extend the shelf-life of warheads designed for submarine launch is running years behind schedule, and unless the government can find a cheaper way to complete the job, it’s on track for “large cost overruns,” the audit concluded.

The work is the responsibility of the National Nuclear Security Administration (NNSA), an agency within the Department of Energy. A senior official there “expressed confidence” that the agency could make up for lost time without going over budget, the inspector general reported.

However, the report said officials working on the program “could not provide plans detailing actions necessary to achieve the needed cost reductions.”

Based on estimates from its fiscal year 2012 budget, NNSA will receive about $1.5 billion to complete upgrades to the W76 warheads by 2016. The project is now estimated to cost almost $1.8 billion, according to the audit.

That would put the agency over budget by $221 million, the inspector general’s report said.

The report faulted NNSA’s handling of the project, saying the agency has not made full use of available management tools and could not measure actual costs against planned costs.

The planned upgrades would extend the life of the W76 warhead by 30 years, as part of the NNSA’s “life extension program.” The program is meant to ensure that the warheads—which date to the 1970s and 1980s—can “safely and reliably remain in the stockpile,” according to the NNSA website. That means replacing deteriorating parts that could affect a warhead’s ability to detonate correctly if it’s launched.

The upgrades have been delayed by years due to technical issues and mismanagement, meaning that the agency may be unable to finish this and future warhead upgrades by the deadlines it promised the Department of Defense (DoD), according to the report.

The report said not completing the work on time could have “national security implications,” though it does not explicitly say what those are. Delays could prevent the government from beginning similar work on another type of warhead, the B61 gravity bomb, in time to meet commitments to NATO, the report said.

Spending money to refurbish nuclear weapons has been a point of controversy in Congress this year during budget debates. The B61 refurbishment came under fire from nuclear policy specialists and activists after Sen. Dianne Feinstein (D-Calif.) said in a Senate hearing in July that the estimated cost of the warhead upgrades had increased from $4 billion to $10 billion.

But Hans Kristensen of the Federation of American Scientists, who has questioned the value of refurbishing the B61, said the submarine-launched warhead is a different story.

Unlike the B61, the W76 “is important for U.S. national security,” Kristensen said. “Clearly, the administration needs to prioritize life extension of a sufficient number of W76-1 warheads.”

Still, it’s possible for the NNSA to save money on the W76.

“The administration could probably reduce the [refurbishment] production by half and still retain enough W76-1 warheads on the submarines for a credible retaliatory capability,” Kristensen said.

In a written response to the inspector general, NNSA said it would adjust its plans for the warhead. “While NNSA acknowledges that additional adjustments to plans will be required to maintain the program within budget constraints, we believe that the appropriate management tools and management focus are in place to ensure successful execution of the W76 refurbishment,” NNSA wrote.

The first round of W76 upgrades was initially set to be completed in 2007, according to a previous audit. The agency’s current deadline for the entire project is 2018, at which point it plans to start upgrades on the B61, according to the new audit.

The new inspector general report is the latest in a series of government reports critical of NNSA’s management of its life extension program. The report echoed language from a 2006 inspector general audit of delays and cost increases involving the W76.

The Government Accountability Office has also been critical of the life extension program. It reported in 2009 that the NNSA and DoD “have not effectively managed cost, schedule, and technical risks for either the B61 or W76 life extension program.”

Mia Steinle is an investigator for the Project On Government Oversight and the civil society coordinator for the U.S. Extractive Industries Transparency Initiative. Her work focuses on government management of the oil, gas, and mining industries.

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